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Five Tips to Cash in on Your Banking Relationships By: Sandi Smith, CPA Product: Tip Category: Practice Development

Are you and your clients getting the most from your banking relationships? As your clients' businesses move through the changing economy, it's a good time to revisit the services your clients need from their banks. Here are five tips to help your clients cash in on their banking relationships.

Tip 1: Be Visible

Encourage your clients to get to know the branch manager as well as the staff. Find out what the branch manager needs, and develop a mutually beneficial relationship. One manager offered to set out my business brochures in his lobby in exchange for me recommending new accounts for the bank.

"Keep your banker in the loop as to how the company is doing and what the future plans are," advises Claudia Cantu, Business Sales Officer for Wells Fargo. "A good banker has the ability to look at situations in a different perspective, and the banker may foresee challenges that a small business owner may have overlooked. Together they can discuss options."

Tip 2: Explore the Services that the Bank Offers

Every bank has a long list of services, well beyond free ATMs and interest-bearing accounts, that they offer to customers in advertisements. Ask about other potential negotiated perks that some banks may offer.

It's worth approaching this topic carefully, in case you uncover any hidden gems. Here's some advice for having that conversation with the banker:

• Learn the bank's language and be specific when asking for new services. Take the example of online banking. Online banking to a bank means viewing your transactions via a web-based browser. Online banking to a QuickBooks consultant might mean downloading transactions directly from the bank into the QuickBooks software. You can easily get the wrong services set up with a simple miscommunication.
• Negotiate for what you want. I didn't want to incur the extra fees that most banks charge for online banking and bill payment through the QuickBooks software. I negotiated to keep a minimum balance in my account in lieu of the charges. This worked great for me for well over a decade.
• Find out what's possible. "Use a variety of the services your bank offers to build up your track record," recommends Jean Houston Shore, CPA and management consultant based in Roswell, Georgia. "The services you can purchase include notary services, foreign exchange, wire transfers, SEP/IRA retirement plans, letters and lines of credit, and merchant card services, as well as basic checking accounts."

3. Understand the Currency of Bankers

"The two most important things your banker is interested in," according to Jean, owner of Business Resource Group, "are your cash flow and your net worth. If you can build the bank's confidence in your business prospects and future growth, then your banker will allow you greater access to the funds you need for expansion," she explains.

Francis Bologna, CPA and financial adviser to CEOs in the oil and gas industry, suggests that business owners take the time to understand the needs that banks have to maintain their reserves. "If you are a demand loan customer, make sure you know that bankers will call these types of loans first to restore their liquidity ratios - and that you have discussed the ramifications of this with your banker."

Tip 4. Don't Surprise Your Banker

Francis, who is based in New Orleans, Louisiana, urges, "www.francisbologna.com" He advises CEOs to explain to their bankers, in plain English, the dynamics of what is happening in their industry. "Make an appointment, long before you need money on your credit line, and bring evidential proof, if possible, to demonstrate it is not just your business but the industry or the region."

"If you don't have a credit line, establish one before you need it," advocates Francis. "Trying to get a credit line when the bank is stretched is just bad business. Get it now before the Feds put any additional pressure on the banking community to perform."

If you need a loan, "do your homework," says Francis. "Prepare, and present a sound loan proposal that addresses cash flow, collateral, and your credit worthiness."

Tip 5: Match the Debt Term with the Collateral

You may be able to find some liquidity by rearranging your existing debt structure. "Where there are fixed assets tied up in working capital lines, strip them out and term the debt as soon as you can," proposes Francis.

Keeping the lines of communication open is the common theme of these five tips. Share these ideas with your clients to help them expand and enrich their banking relationships.

Last Updated: 09/22/2008

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